Advances in technology have seen an explosion of flexible benefits schemes, which are an increasingly popular option for suitably sized companies.
In addition to traditional staff benefits, such as pensions, medical insurance and life cover, there is now a wide range of innovative ideas for employee schemes. The technology underpinning these schemes is easy to use and encourages employee participation, typically through a web-based interface.
Kiki Stannard takes a look at some of the more innovative and unusual flexible benefits provided by forward-thinking employers.
Share and share alike
Once used on a discretionary basis as a share incentive scheme for executives, many companies now extend share ownership to all employees, and it is an increasingly popular option.
In fact, the Government encourages share ownership with the HM Revenue & Customs approved Share Incentive Plan (SIP) and the Save As You Earn (SAYE) share option scheme, which offer employees discounted or free shares up to a value of £9,000 per year over a three or five-year period.
A word of caution however: under relatively new accounting requirements, companies are required to value their employee share options and include them in their accounts – a complex area on which professional advice should be sought.
Take it or leave it
The ability to buy and sell annual leave is a benefit that’s been around for some time, although many employers have been slow to take it up. Staff members must take an adequate break without taking too much time off and disrupting business. A typical holiday policy allows the purchase or sale of between three and five days a year. The price of each day of leave is usually a set formula of salary based on the normal number of working days. Deductions are made from gross pay under a suitable salary sacrifice arrangement.
On your bike
In a drive to make staff healthier (and perhaps speed them into work more quickly!), employers can team up with suppliers to provide bicycles for staff to travel to and from work. As long as no staff are excluded by the policy, there is generally no taxable benefit.
Hit the high street
Employees can be issued with a discount card that is topped up with monetary value from their net pay each month. The card is used like a debit card in retail outlets. Many retailers (including major high street stores and online companies) will offer discounts of up to 15% for using the card. The discount is provided automatically at the point of sale or by adding credits to the card.
Benefits for sale
We have seen an increase in the availability of some benefits for purchase by all staff through voluntary schemes. Employees can buy additional life assurance, critical illness cover, medical or dental insurance offered by their employer at discounted rates, and often with less stringent underwriting terms. Other benefit options might include access to childcare vouchers, gym membership and other tangible benefits.
Following the pension reforms of April 2006 (A-day), many employees needed financial and pension advice. Employers can arrange for advice to be provided as an employee benefit. Staff can consult with a preferred adviser, often on a free or subsidised basis.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
